When looking for a home loan, prospective homeowners want to ensure the mortgage loan officer has the proper training and can provide sound advice. One way that clients can be sure of this is by looking up the loan officer’s NMLS number.
But what exactly is an NMLS number? What is the NMLS and how do you get an NMLS license? In this article, we will answer these questions and more.
Here is everything you need to know about an NMLS license.
NMLS stands for Nationwide Mortgage Licensing System, which is a centralized online database used by finance and mortgage regulatory agencies to ensure state licensing programs are maintained.
Why is this important? It is because a licensed mortgage loan originator (MLO) is someone who has successfully finished the professional certification needed to originate mortgages and gives home loan advice, at least in one state. Both individual mortgage loan originators and mortgage lending companies must remain in regulatory compliance. This includes renewing their state licenses every year.
State agencies have a few requirements before MLOs are eligible to practice in their state:
This is all a part of the licensing review process. Mortgage loan officers also must finish eight hours of continuing education every year to maintain their state license. If you’re interested in pursuing this career path, read our guide on how to become a mortgage loan officer in 10 steps.
As a centralized repository for licensing in state mortgage industries, the NMLS started operations in January 2008. In July of that same year—when Congress passed the Secure and Fair Enforcement for Mortgage Licensing Act of 2008, otherwise called the SAFE Act—the NMLS took on the role as we know it now.
After the SAFE Act was passed, states were required to pass legislation mandating that mortgage loan offices be licensed. The SAFE Act also required that agencies in all states participate in—and share—licensing information through the NMLS.
To become a licensed mortgage loan originator in the state of California, you are required to complete six steps. The steps to getting your NMLS license in CA include the following:
Let’s break down each step to give you a clearer idea of what it takes to get your NMLS license in California:
The NMLS processes MLO licensing requests for all 50 states, not just California. Creating an account is a simple process that takes just a few minutes to finish.
Here is what you will need to do to complete this process:
Becoming a licensed MLO in California requires you to finish the 20-hour SAFE pre-licensing course, as well as additional course work required by either of the California state licensing agencies. These include the California Department of Financial Protection and Innovation (DFPI) or the California Department of Real Estate (DRE), which was formerly known as the California Bureau of Real Estate (BRE).
Every state requires 20 hours of mortgage education from an NMLS-approved mortgage school. If you want a new mortgage license, you will want to enroll in the 20-hour SAFE course in addition to the requirements that are specific to your state.
A CA-DFPI license is a requirement for any MLO employed by a DFPI-licensed broker or lender. That applies to any mortgage lender governed by the California Residential Mortgage Lending Act (CRMLA) or California Finance Law (CFL). Additional details include:
The DRE issues mortgage loan originator endorsements to licensed real estate agents. While this will provide you with the most flexibility in your career, you will have to finish and maintain the real estate education requirements, which includes:
You will then have to take the National Test Component with uniform state content (USC), which you can do through your NMLS account. The SAFE MLO exam covers federal mortgage-related ethics, laws, mortgage loan originator activities, and more generalized mortgage knowledge.
The USC part of the exam covers the following:
The next step is to apply for your MLO license on the NMLS website. To apply, you will need to do the following:
To receive your California MLO certification, you will have to provide the following information and pay the associated fees:
